tv Bloomberg Markets Bloomberg September 5, 2016 10:00am-11:01am EDT
mark: u.s. exchanges closed today for the holiday. still loads of action happening around the world. we will take you from london to tokyo to moscow in the next hour. here is what we are watching today. after a big jump in u.k. services data, sterling is rallying. also moving is the dollar. falling today on speculation that the fed will raise interest rates or won't raise interest rates this month. oil surging. talks between russia and saudi arabia in the ways of stabilizing the market. falling short of a freeze on output. those new developments, to russian president vladimir putin talked to bloomberg exclusively. he would like opec and russia to agree. more highlights from that our on
bloomberg. 90 minutes left in the session in europe today. no trading in the europe -- the u.s. for labor day. stocks rising for a third day after gaining for the second consecutive week. the stoxx 600 now it's highest since january 6. top of the pile. oil and gas at 1.1%. russia and saudi arabia said they would work together to stabilize global oil. let's get to some of the big movers, the big gainer this was provider of banking software. jumping to a record earlier after credit suisse upgraded the stock to outperform from neutral. it added it to a list of high conviction ideas among swiss small and mid-cap stocks. credit suisse expects the company to exceed its target. a strong momentum and licensing
breakf -- licensing. large -- visibility remain strong in 2017. a progressive renovation plan of large banks relicensing contracts as well. the price target is 71 swiss francs. today we are at 61.9. is median price target 53.54. that implies a 14% downside. let's get into the big piece of data today. u.k. services jumping the most on record in august. 52.9 from aed to seven-year low of 47.4 in july. that is the biggest monthly increase since the survey began to decades ago. economist forecasts rise to 50. economist predicted an imminent
recession will be avoided, but urged caution saying data since brexit does point to stagnation. throw in the manufacturing data last week. data in the construction on friday, and it points to an interesting boe meeting this month. in november many suggested we get losing stimulus once again -- loosen stimulus once again. it is on track for its fourth straight weekly gain, the longest stretch since february. it is rising for a fifth day against the euro. the longest winning stretch since june 23. exities of data showing has not been as severe as many anticipated. this is the sterling-dollar going back to 1980. the pound reached a record low on august 15. that was lowest since june 25,
1985. what a wonderful chart that is. let's check on bloomberg first word news today. mara -- >> there is no solution to ending syria's war after meeting between barack obama and vladimir putin. the u.s. described it as productive but tough. mr. obama said an earlier plan to end hostilities has slowly unraveled. president obama: as you recall we initiated the secession of hostilities a while back. initially it did lessen some of the violence. and then slowly it unwound. we're back into the situation in ad's -- assad's regime is bombing with impunity. firstma will become the
sitting u.s. commander in chief to visit the south east asia nation of laos today. one main topic is deadly bombs left over from the vietnam war that still litter the countryside. german chancellor angela merkel is down to fight for her refugee policies despite a humiliation political defeat. union bossemocratic of the anti-immigrant alternative for germany party and a state election. she says she is dissatisfied with the result accept the challenge of trying to win back public trust. poland's government has a constitutional dispute going on for months. over the ruledoff of lower the european commission after twice overhauling the constitutional tribunal, the nation's highest court. the crisis in the eu and nato member is threatening investment in the $475 billion economy that made the to a credit rating downgrade by moody's. 41% of employees in the
u.s. will have some stock working today as the rest the country celebrate labor day. that's according to usa today which said last year 40% of u.s. workers did not take a single vacation day. while all americans are reportedly working more, than the most overworked. turkey tops the list, mexico not far behind, the u.s. came in at number 16. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. mark: thanks. brexit threatening to undercut recovery. economist see a high probability of the ecb lengthening qe. data showing a gauge of economic growth. is weakest the 19th month. our next guest said policy innovations could be announced on thursday but delivery is more
likely in october. neville hill, penalty director -- managing director. there seems to be an overriding consensus that the ecb will extend stimulus by around six months what about the idea of tweaking the purchasing rule? neville: they will have to do that at some point. on current trends i think you're lucky to run out of bonsai november. it willely i october have to tweak some of the constraints they proposed to allow themselves to buy war bonds. mark: do you increase the maximum share the ecb is allowed to buy? or drop the rule that the ecb cannot buy bonds if it they are yielded love the deposit rate? neville: we think they might tweak a lot of the rules shift theo as not to market one direction. if they were to increase the
proportion of any bond they buy, you are likely to see the bond curve flattened. if they allow themselves to the the rate -- they can say bonds he buy for the course of the month has the yield about the deposit rate. that could give them some flexibility. conversely they could say that for specific issues, most notably germany with a high credit rating, they are allowed to buy a lot -- above the 32% limit. mark: but not necessarily on thursday? neville: in theory they could. given they are likely to extend the duration of the qe program at that point, the question from journalists will be what you going to do about buying the bonds and a couple of months time? they will say we will either come up with a plan in october or now something on thursday. mark: do they need to live more bonds,-- buy more different kinds of securities? or is there no necessity right
now? neville: i think there is a necessity in terms of practical implementation of the policy. is what they are doing working sufficiently? i guess you could say if you look in the last few months, it has proven remarkably resilient to the shocks of brexit. the recovery is still not generating massive growth. mark: it is well below its 2% target. neville: and inflation which probably matters more for the longer-term deliberation has been stuck for three years now. mark: our survey says less than 70% of economists say -- think inghi will reach his goal 2019. happen a monthl ago. a lot changed in a month. 2019hink 2% is probable by when he waves goodbye? neville: i think it is unlikely.
clearly if there's an oil shock, you look at a 2% inflation break. if you're talking about 1.8% or one point & core inflation, that is hard given the lack of vigor in the recovery. it is ok but not strong enough to start generating upward pressure on inflation from the labor market. i think we are way off in achieving that. mark: you said the eurozone is weathering brexit. the u.k. economy seems to be weathering brexit, given the set of pmi data in the recent days. mark: i think the pmi's for august have been surprisingly strong. a panickyuggest after july for the u.k. corporate sector we've seen a rigorous bounceback to levels consistent with insipid a positive growth. it looks after the panic of july the economy has stabilized. i think for us critically it is
still an economy that is weak and will stay that way for some time. mark: we don't need further easing from the bank of england in november as many suggested. the bank suggested the further tweaking of the benchmark rate is now not necessary. neville: i think it probably is. the economy still needs the stimulus and at the margin of another 20 basis points. probably wait for the data to weaken again before easing. they will want to give a final bit of powder dry for any weaknesses. what we are likely to see from here is the u.k. data drag and failed to impress in as much as you look at some of the details of the surveys, aside from the bounce we saw in the activity data, the sense of commitment from the corporate sector just is not there. expectations are still quite low and employment expectations are low. businesses don't seem keen to
invest high yet. unless we get a turnaround i think the economy will remain weak. mark: the faces lawmakers on wednesday. is he opened a criticism with the bank of england? maybe they should not have brought up the bazooka in early august given the rebounding data we have seen a recent days. is the criticism justified or is preemptive action always the best? neville: i think preventive action is always the best. did you see what i just did? you look at the surveys, i think you can say you are underwriting the recovery and critically for the boe. what they were doing was presenting -- preventing a second round effective financial stress link that would've worsened the downturn. you look at the stakes of the economy going into the brexit vote, it was hardly pulling -- roaring.
i don't think it's an overreaction. mark: world interest rate probability. the probability of a u.s. september rate hike is 34%, november 30 9.7%. -- 39.7. back in line where we were before the report. one in three for the fed in september? hawk you be more talk -- ish? neville: i would probably be dovish. if you look at the u.s. data, it was not strong. there was a sharp fall in orders. if you look at the details of the labor market report, it was a particularly robust. pay was slow. in all the amount of income the labor market was generating was hardly buoyant. after a couple of months of strength, but nevertheless there is nothing there to save the market is deserting the pressure
that requires the fed to act. mark: 30 seconds. neville: i think i would still be looking for downward pressure on sterling for the u.k. if anything i think globally here at a point where you might see it pick up a little bit and see some upward pressure. mark: boj, the other central bank we are watching. that is what we are looking at next so stay there. who have more. banks are taking us through all the big central banks over the last weekend. neville hill. as promised, more room to run. the boj governor says the central bank's tools a ready to use. this is bloomberg. ♪
♪ mark: you are watching bloomberg marketsmark:. u.s. stock markets are closed today for the labor day holiday. time for the bloomberg business flash. u.k.'s biggest companies are having a harder time getting shareholder approval for executive pay packages. a number of companies in the ftse 100 failed to win at least 75% of shareholder votes in support of executive compensation plans. almost double since 2012. investors said to have taken issue with the lack of transparency and disclosure over ceo bonuses. china's most popular social media service and entertainment company is now the country's most valuable corporation.
their 4% gain today pushed ahead for china mobile for the number one spot in the country and top 10 globally. nearly $257 billion putting it in the ranks of at apple and alphabet. that is the latest bloomberg business flash. japanese shares rising to a three-month high today. index gaining in afternoon trading. currency rebounding after comments by the governor. boj says the central bank has all the tools they can use and will use them as necessary. >> even within the current framework there is ample room for further monetary easing in either of three dimensions. quantity, quality and the interest rate. other new ideas should not be off the table. what we should bear in mind when conducting monetary policy is
not its limit, but a comparison between its benefits and costs. as is the case with any public policy. there is no free lunch for any policy. mark: that is the market movers this week. tomorrow the was released its nonmanufacturing pmi for august. on wednesday the bank is a suspected to announce it will hold off from adding more to its record stimulus. on thursday the european central bank will decide whether to unleash more stimulus or holdback in case the region's economy worth -- hold back in case the region's economy worsens. services sliding to the lowest level since early 2015. on thursday global markets will turn to china which will release it cpi and ppi data. coming up more from bloomberg's exquisite interview with vladimir putin.
♪ mark: you are watching bloomberg markets on bloomberg television. for more than 16 years, vladimir putin has been with the held of russia as prime minister or president. now in his third presidential term it is fitting to ask about further political ambitions. as part of arts was an interview, editor in chief john nichols flight put it to him squarely. heavy yet decided if you will run in the presidential election of 2018? president putin: we are now on the brink of parliamentary elections. we are holding the elections to see the results. there will be another in almost two years. it's too soon to speak about this.
in the rapidly changing world it is damaging to talk about this. when you work to make sure the tasks we set ourselves are completed. when he to raise the quality of people's lives, developed the economy, and increase the country's defensive capabilities. depending on the solutions to these tasks, then we can see that organize the presidential election campaign in 2018 and who should take part. i have not yet made a decision for myself. n: is russia getting easier to run or harder? and it was the: second, khrushchev. john: and your time is a gotten easier? i think it isn:
more complicated because despite all the criticism from our western partners we are developing democracy. these elections are significant and more people will take part than in previous years. there was a practical dimension. many people are asking what is going on with the country? authorities --of what do they have to offer?
they don't say how to make things better and given the shallow views are fairly realistic -- barely realistic. and you look great on television. say they are ready to take responsibility. but--opular john: are you can he is of the chinese the donut to go through these elections? president putin: there is a different political system in china and it's a different country. i don't think you would like to see 1.5 billion people have disorder in their country. let's give the chinese the right impossibility to decide how to country. their russia is a different country. we have a different process. different development of political systems. is a different quality.
it's about the quality of the political system. is growing. -- it is growing. happy and imakes me would like for the system to become stronger so have a balance and our political system that would allow it to be in an effective state. that was a part of our bloomberg editor in chief's exquisite interview with russian president vladimir putin. don't miss our extended special program featuring more that interview at 5:00 p.m. in london, 12:00 p.m. on the work. -- in new york. this is bloomberg. ♪
hey how's it going, hotcakes? hotcakes. this place has hotcakes. so why aren't they selling like hotcakes? with comcast business internet and wifi pro, they could be. just add a customized message to your wifi pro splash page and you'll reach your customers where their eyes are already - on their devices. order up. it's more than just wifi, it can help grow your business. you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. mark: life of bloomberg global headquarters in london, i'm mark barton. you are watching "bloomberg markets."
no trading in the u.s. today because of the labor day holiday. >> for barack obama does not want an escalation of a western arms race. his remarks follow putin's continued insistence that russia has nothing to do with the hack of the dnc e-mails the summer. president obama: we have more capacity than anybody both offensively and defensively, but our goal is not to suddenly in the cyber arena duplicate a cycle of escalation that we saw other armses to races in the past. obama and prudent also agreed
to keep trying to get a cease-fire in serious -- syria's civil war. israel's satellite blew up in last week's spacex explosion. a third of its value evaporated in the explosion. the biggest blow to the countries in graham since the the country -- the biggest blow to the country's space program since the space shuttle discovery. the camp is known as the jungle. it is home to 7000 refugees trying to reach the u.k. says donald trump woulstop accepting syrian refugees into the u.s. pence says the refee program
puts the security of the u.s. second -- global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm nejra cehic. this is bloomberg. david: oil paring its gains after rising 5% earlier. agreedand saudi arabia to work together twin sure oil market stability. putin told bloomberg everyone should be on the same page. -- work together to and sure oil market -- to ensure oil market stability. putin: it would be -- it would be correct
to find some sort of compromise. telling reporters at the g20 that oil prices are not fair right now. they need to be higher. joining us with more, ryan chilcote. tosia, saudi arabia agreeing cooperate to stabilize global markets. as one analyst put it, is this a case of new wine in old bottles? ryan: the anticipation we were going to get some sort of deal and the absence of a really concrete deal. price at 8:00 in the morning, we get news from the chief of staff of the saudi arabia and oil minister's team. we hear that the russians are going to join the saudi oil minister at that briefing at the g20.
you see the price of oil just take off, rising by more than 5%. its biggest intraday gain since april 7. it looked like we were going to hit $50 a barrel. and then they start talking and guess what happens to the oil price? it tanks. they've agreed to coordinate their action on the oil market. they discussed lots of options come including a production freeze. the saudi oil minister as he does not think there is any need for a production freeze right now. he says the oil prices climbing just fine on its own right now. we heard within the last 15 minutes from vladimir putin saying he thinks the oil prices price isory -- satisfactory. has though the price of oil declined dramatically, in ruble terms, it is where it was before the oil prices started tanking.
metal meetse the the road here. we have rhetoric and then we have reality. the price of crude, it has been declining this year. on the other hand, this goes back to 2010 come green, you have russian production. russian production keeps on climbing. russia gets half of its revenue from oil and gas. to keep that production up because it has to protect market share. deal, think ofa it as a mexican standoff. you will not the denier guns, you will not stop pumping oil because you have to keep your clients happy. -- you will not put down your guns. production have your
at its ice level before you agree to a freeze. of course let them are potent like to see a production freeze, just as he would have back in april when it did not happen. putincourse vladimir would like to see a production freeze. mark: crude oil output at opec is at a record high. it's not just russia. the crude is being pumped at record levels by the opec body itself. i did not want to confuse people with too many lines. another big one in opec is iran. which was locked out of the oil market for a good time. this chart here shows you iranian oil production. 3.6 million barrels a day today. 2012, the beginning of 2012 is
when european union under pressure from the u.s. started talking about banning crude imports from iran. it was june 30 when that ban went into place. here is where iranian production stood then. saying we are happy to brees production as soon as we get back to present levels. saying we ares happy to freeze production. while we may not get that ceiling, there is a disagreement minister --sian oil right around 3.6 million barrels a day. they are radiance will tell you they were pumping 4 million barrels a day. iranians will tell you they are pumping 4 million barrels a day. they say they were producing 4 million barrels a day.
the saudi's and say you were not producing that. allies prepared to give the iranians more leeway. maybe it isare not iran that ends up derailing a possible deal. mark: where european equities are paring today, no trading in u.s., but there is trading here. third consecutive day on the stock 600, the best run for a while. since july 29. at the highest since the early days of 2016. ftse is lower, taxes lower. -- dax is lower.
oil stocks leading the advance. sterling today rising after a strong pmi services number. biggest lead ever for the series. mirrored what happened in the -- the poundry down for a fifth consecutive day. more measures are on the table if necessary. euro is down against the dollar. in the government bond market, check out what's happening to the u.k., sending yields falling despite the stronger-than-expected u.k. services pmi report. a 10 point trading range since draghi last spoke. program ecb extend the
dining plate. how a new cool war with russia is like the old cold one. barclays has named a jpmorgan executive to run its investment banks. tim will run barclays corporate and international division to fill the vacancy on jeff daly's management team. china's most popular social media services and entertainment company is now the country's most valuable corporation. tencent rose more than 4% today, pushing ahead of china mobile their market value is now $257 billion. one of the top 10 companies globally. -- buying sfr group for $2.7
billion. moving to overhaul the global telephone and television empire -- michelle spoke exclusively with bloomberg about the acquisition. >> we believe it is fair. it is a reasonable offer. leave it to each shareholder to decide whether they want to bring their shares. sfr shareholder today, this offer makes a lot of sense in terms of what you will with that exposure to the u.s. and a much more diversified portfolio of assets. americans may celebrate today's labor holiday with the next her burger or two. ground beef prices are not the
lowest level since 2011. extra burger or two. ground beef prices are at their lowest level since to an 11 -- since 2011. >> henry kissinger has said it is possible, russian prime minister to meet you and you and in ukraine, russian troops have been fighting with and arming pro-russian separatists since 2014. u.s. congress voted to supply more lethal weapons to ukrainian army. for now, a cease-fire is in .lace russia's air campaign has been conducted in close proximity to where u.s. aircraft are pursuing their own bombing campaign against islamic state vladimir putin said recently that russia
and the u.s. are close to striking a deal on fighting terrorists in syria. u.s. has come under pressure from allies to arm sunni rebels with antiaircraft weapons. that would have put u.s. weapons in position to kill russian soldiers, just as american arms did in afghanistan in the 1980's and soviet arms guild u.s. troops in vietnam. the cold war began in 1947 when u.s. president harry truman asked congress to help stop the soviet union from projecting its power. soviet governments soulless policy as imperial aggression from an american elite. it wasn't until 1969 that the two sides saw a kind of truce. russia has no ideology with communism -- today should be
treated similarly because russia retains a vast nuclear arsenal as well as the will and military means to be a regional superpower. s russia may not have communism to offer the world, but he has found takers for the concepts of managed democracy and conservative values. whether a cold war or just a cool one, it could be long and costly to both sides. you can read about russia and all our quick takes on the bloomberg. that is our global business report. russia's presidential election in 2018 looms. john sat down with vladimir putin for an exclusive interview. he asked the russian president
whether he will stand again for another six years. he made it clear he is in it for the long haul. he weighed in on the qualities his successor should have. >> you just reorganized part of your government, promoted some people, some former bodyguards. is that the sort of area where the next leader from russia will come? from the younger generation of people were beginning to emerge? vladimir putin: of course. i think the future leader has to be a young person. but also immature person. person.ure this is not the first time we've had members of the defense ministry being promoted to regional administration. federal guard service should not be an exception.
the most important thing is the right person who wants to grow is capable of growing and wants to serve the country with more response ability. -- with morebility response ability. if that person has potential, why not let them work? -- with more responsibility. get to know their programs. there must be a relationship between the head of the region and the people who meet there. mark: vladimir putin speaking exclusively to bloomberg editor -- you can seeikel's w
u.s. sales in july. i found a lot to discover when i took the suv for a spin around new york city. i drove the our sport, which starts at $54,000, but will run you close to $64,000 with upgrades. r-sport. top speed is 155 miles per hour. the steering, standard all-wheel drive an automatic transmission. the exterior of the car is exciting. green costs and next trip you hundred dollars s -- an extra few hundred
dollars. svelte jungle feline. inside is the massive panoramic sunroof. it spans the entire ceiling of the car. at a lot of natural light -- adds a lot of natural light. i congratulate jack for giving us well-made leather see to come intuitive controls and even ambient mood lighting. g forcongratulate jac giving us well-made leather controls andive even ambient mood at lighting. the window controls are on two different levels.
line, jaguar has a hit. .t is stylish, athletic mark: hannah elliott there. you can read all about luxury cars at pursuits, your destination for the finest things in life, including travel, watches, dining and property. have a look at where european equities are bearing on this monday's session. varying -- are faring on this monday's session. companies the best-performing industry group. the ftse is lower, the dax is unchanged. we rose last week for the second consecutive week. have a look at what's happening
in the currency markets today. what a week it has been for sterling. all sorts of data showing the resilience of the u.k. economy post brexit. sterling today the highest level since the endllar of july. euro is lower against the pound. sterling is lower against the yen. we will break down the countries to watch with blackrock's head of emerging-market debt. this is bloomberg. ♪
this is the european close on "bloomberg markets." u.s. exchanges closed for the holiday. from london to frankfurt. here's what we are watching today. with euro area inflation stuck at zero for two years, what if lengthen -- mario draghi lengthened qe? barclays finally filled its top former, naming tim, a jpmorgan executive. in an exclusive interview with bloomberg, russian president vladimir putin reaffirms his exports.the state run